The Case for “Green” Technologies: What is the need?

Posted by Ian Matthews on Mar 6, 2012

This is part of a larger series on Kiva’s strategic initiatives and innovative loan products, which are designed to expand opportunities for more borrowers. Kivais looking to partner with companies or organizations working to expand access to clean, sustainable energy.

2012 is officially the “International Year of Sustainable Energy for All,” as pronounced by United Nations Secretary-General Ban Ki-moon. Yet today, 1.5 billion people (every one in five) have no access to electricity, while double that rely on wood, charcoal, coal or animal waste for heating and cooking. And the need continues to grow. It’s estimated that demand for electricity in developing countries alone will rise 40% by 2030.

In response, a number of world governments have taken development assistance from USAID and the World Bank to build out energy grids and diversify their power sources. So far, these projects have proved unsustainable.

In one example, international donors stepped in to rebuild Liberia’s defunct national electricity corporation after the civil war. Since 2006, this Emergency Power Project has supplied electricity to only 0.6% of Monrovia, Liberia’s capital. Outside the city, the grid is nonexistent. And those that do have power pay more per kilowatt-hour than households in the United States, France and the United Kingdom combined.

Given this experience, the major energy challenge facing developing governments seems to be how to power peri-urban slums and rural areas where grid electricity is unlikely to reach. As a silver lining, the types of coordination and capacity problems experienced in Liberia have led the global community to acknowledge the potential of off-grid solutions to “energy poverty.”

To support these alternatives, public-private partnerships have sprung up to support renewable energy research and development. While more successful on the whole, these projects have suffered both capacity and funding shortfalls preventing full implementation. We will explore this model in great depth in our next post in this series when we look specifically at energy funding.

Are renewable technologies really the future?

Sustainable power is essential to sustainable development. It is proven to lead not only to poverty reduction, but also slowed climate change, improved public health and women’s empowerment. Off-grid energy technology also offers an exciting opportunity for private social enterprise to find ever more innovative and sustainable ways to reach the underserved.

Right now, the energy poor in Africa spend almost US$17 billion a year on fuel-based lighting and heating sources like kerosene. Despite high costs, these products offer little in return. Lamps and cookstoves powered by kerosene are often inefficient, provide poor lighting and heat, and can cause respiratory problems from smoke inhalation.

Like cell phones, solar lighting and cleaner cookstoves can offer simple and flexible alternatives. Kiva believes that the biggest potential for impact lies in supporting technologies on a smaller scale that are simple, clean and cheap. At its core, energy poverty is about access to useful sources of sustainable power.

As the lone village Internet kiosk teaches us: technology, no matter how well designed or intentioned, can only magnify human intent and capacity, not substitute it (for these findings we look to India’s study on information and communication technology for development discussed here).

Where there is unmet need, significant demand exists for reliable and affordable off-grid energy solutions. Kiva funding has the opportunity to expand the market and disseminate products that we believe can have a genuine impact helping poor households access the benefits of clean power.

Ian Matthews is an intern on Kiva’s Strategic Initiatives team, looking for new partners and loan products to extend opportunities and access to even more people around the world. Ian has an MSc in Global Politics from the London School of Economics and Political Science and has previously done field work in Honduras. Send him your feedback on this blog series at blog@kiva.org.